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of <h1>Tribunal grants appeal on printing ink valuation, emphasizes compliance with CAS-4 guidelines</h1> The Tribunal allowed the appeal in the case concerning the valuation of printing ink cleared on a stock transfer basis. The appellants' compliance with ... Valuation Issues: Valuation of printing ink cleared on stock transfer basisThe appeal was filed against the Order-in-Original regarding the valuation of printing ink cleared on a stock transfer basis. The dispute arose from the variance in valuation methodologies between the appellants and the Revenue. The appellants, a 100% E.O.U., transferred goods to their sister units at Bangalore, Noida, and Baroda without selling them. The Commissioner appointed a Cost Auditor to conduct a cost audit, resulting in a certificate specifying overhead costs and profit percentages. The appellants recalculated assessable value for DTA clearances based on the Cost Auditor's recommendations, leading to payment of differential duty. Despite the Revenue's show cause notice for alleged under-valuation, the Commissioner dropped the demand citing Circular No. 38/2003, emphasizing that stock transfers were not sales. However, a demand of Rs. 2,66,627/- was confirmed for a specific period, prompting the appellants to challenge the order.The main arguments presented by the appellants included the availability of Modvat credit to their Bangalore unit, rendering duty payment redundant, and the adoption of profit margins based on the Cost Auditor's advice. The dispute centered on the inclusion of selling and distribution expenses in overhead calculations, with the Revenue contending for their inclusion while the appellants followed CAS-4 guidelines. The appellants sought relief based on the revised Circular No. 692/8/2003-CX, aligning with CAS standards for cost determination.Upon careful review of the case records, the Tribunal acknowledged the Cost Accountant's role in determining profit margins and the appellants' compliance with the Cost Accountant's certificate for duty payment. The Tribunal emphasized CAS-4 guidelines, prohibiting the addition of selling and distribution expenses to the cost of goods consumed internally, which should also apply to stock transferred goods. Considering the principle of revenue neutrality and established case laws, the Tribunal allowed the appeal, granting consequential relief to the appellants.
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